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Recently, Hitachi Vantara commissioned Forrester Consulting to conduct a Total Economic Impact (TEI) study to examine the value of pay-per-use consumption and managed services within its STaaS offering. The following is a summary of its findings.
Forrester spoke with IT decision-makers at four organizations with extensive experience using the service. These organizations included financial services, logistics, and IT services companies, ranging from $7 billion in revenue to $174 billion. We found that a composite organization, representative of all the participating companies, experiences benefits of $25.88 million over five years versus costs of $8.24 million, resulting in a net present value (NPV) of $17.64 million and an ROI of 214%.
One very interesting finding from the research and financial modeling Forrester did is that the cost savings benefits of CBP were dwarfed by the combined benefit of streamlined operations and improved availability.
- Shifting from upfront purchase to pay-per-use consumption, or CBP, accounted for an on-premises storage cost reduction totaling $5.8 million. While this is a very compelling benefit, it accounts for less than a quarter of the total benefit value of $25.9 million. A storage architect in the insurance industry described how this affected his team: “We used to have capital investments—now we have rent. It has saved a tremendous amount of time in the procurement process and improved financial flows.”
- However, managed services within the STaaS contributed to productivity gains within the IT team that accounted for a $5.3 million benefit. This empowered team members to make more strategic contributions to the business. The director of storage and backup services added, “It’s a lot easier to manage than it was in the past. So, rather than us focusing on keeping the lights on, now we’re able to shift our focus to add more value.”
- The largest contribution to the overall value, however, was the $14.8 million benefit that resulted from improved service levels, availability, and operational efficiency of the organization. The global head of IT infrastructure at a financial services company told Forrester, “Before Hitachi, our estate was melting. We had arrays that were underspecified for the use case. We had outage after outage after outage during the business days when we were busiest. When we brought Hitachi in, the world became a much better place.”
All the executives Forrester interviewed for the study echoed these observations. While IT organizations and their management teams had shifted to Storage as a Service primarily for the pay per use cost savings, they discovered that the unexpected value of managed services within their STaaS was an even greater benefit to their organizations.
For more information read the full TEI study, The Total Economic Impact™ Of Managed Services From Hitachi Vantara For XaaS, and visit EverFlex X as a Service (XaaS).
